The Hedgehog (Hh) family of proteins coordinates cellular growth and differentiation in a number of developmental contexts by eliciting graded responses in the cells surrounding Hh-producing cells. Aberrant Hh pathway activity is associated with developmental deformities of the face and forebrain, and prevalent cancers such as prostate cancer and basal cell carcinoma (BCC). Understanding how the Hh signal is conveyed from the extracellular milieu to intracellular effectors is therefore pivotal to the successful prevention, detection, and treatment of these and other diseases associated with Hh signaling. This proposal focuses on the mechanisms that allow cellular recognition of the secreted Hh protein at the plasma membrane and subsequent transduction of a signal across the membrane to induce specific intracellular responses. Direct interaction of Hh with the twelve transmembrane protein Patched (Ptc) is required for relinquishing Ptc-mediated suppression of the seven transmembrane protein Smoothened (Smo) in target cells. This interaction is facilitated by Dally-like protein (Dlp), a heparan sulfate proteoglycan, and CG9211, a member of the immunoglobulin (Ig) superfamily of receptors. Activated Smo transduces a signal across the membrane in a process that involves recruiting to its cytoplasmic tail a large regulatory complex that includes the transcription factor Cubitus interruptus (Ci). The mechanisms by which Dlp, CG9211, and these cytoplasmic protein-protein interactions contribute to Hh pathway response are unclear. In order to study reception and transmission of the Hh signal at the cell membrane, we have developed novel tools that include cultured cell-based assays for pathway responsiveness, reagents for isolating and detecting Hh signaling complexes, and double-stranded RNA libraries that inhibit specific gene function in Drosophila and mouse by RNA-mediated interference (RNAi). By incorporating these tools in a biochemically- and genetically-based strategy, we propose to: 1) determine how Hh signal is sensed at the cell membrane, 2) determine how Smo transduces the Hh signal to cytoplasmic components, and 3) identify Hh pathway components by systematically testing gene function using RNAi-based technology. [unreadable] [unreadable]